Immediate annuities can provide dependable security:
a stream of income payments that will continue for the
rest of your life or for a period you select. If you
are about to retire, an immediate annuity may be a good
place to put a large lump sum of money accumulated through
a deferred annuity, a retirement plan or other savings
vehicle.
To purchase an immediate annuity, you make a one-time
payment, and distributions typically begin within
a month. Immediate annuities can be fixed or variable,
just like deferred annuities. The income payments
you receive from fixed immediate annuities are based
on the amount you contribute and the interest rate
environment at the time of purchase and will not
change. The payments from variable immediate annuities
fluctuate based on the performance of the investment
options you chose. Although payments may go up and
down, variable annuities are designed to provide
income that you hope will rise over time to help
you keep pace with inflation. You can choose from a number of options for receiving
income from an immediate annuity. A life option guarantees
a specified income for as long as you live. A period
certain annuity guarantees an income for a specific
period of time, such as 15 years. Perhaps the most
popular choice is known as a joint and survivor option,
which guarantees that income payments will continue
for the life of the primary owner and a second person.
The guarantee is made by the insurance company issuing
the annuity. |
